Federal Government Indicts Owners of Major Online Poker Companies and Shuts Down Three Sites

The US Attorney from the Southern District of New York announced the unsealing of a major indictment against the founders of the three largest online poker sites — PokerStars, Absolute Poker and Full Tilt. A copy of the press release is attached HERE.

The indictment charges the defendants with conspiracy to violate the Unlawful Internet Gambling Enforcement Act which prohibits processing of transactions related to online gambling; bank fraud; money laundering conspiracy; and illegal gambling. In addition, the government restrained 75 bank accounts and filed a civil forfeiture case. The government also seized the domain names of the three poker sites and restricted the use to play money.

Since 2006, the US Attorney for the Southern District has aggressively prosecuted individuals and companies connected to the online poker industry. The US Attorney in the Western District of Seattle also has been investigating individuals and companies.

Besides the FCPA, illegal poker prosecutions has been the government’s largest source of seizures and fines. Companies and individuals have rarely challenged the government’s theories of prosecution and allowed the government to keep money seized around the world from linked bank accounts. In other words, the government has a valuable cash cow. Many online poker players will howl with the shut down of the three popular sites. Others will claim that the government should be spending more time on more serious crimes.

The government’s prosecutions are occurring at a time when many states are considering legalizing online poker, as authorized under the Unlawful Internet Gambling Enforcement Act.